Published: Sunday, January 15, 2012, 5:55 PM Updated: Sunday, January 15, 2012, 5:55 PM
TRENTON — Gov. Chris Christie has ordered a complete review of state purchasing laws and the public contracting processes, prompted by a report that showed one in five multimillion dollar purchases made by governments in New Jersey broke the law.
He said he intends to simplify the rules, leaving less room for errors and therefore less cover for violations.
The Record and Herald News reported last month that previously confidential figures from the Comptroller’s Office showed errors and illegal provisions in one out of every five contracts worth $2 million or more.
In the highest bracket of contracts, each worth $10 million annually or more, one in three broke the laws designed to make governments pick the fairest bids when spending taxpayer funds.
Prompted by The Record and Herald News report, Christie instructed the state treasurer to review how the state buys goods and services, find ways to eliminate accidental errors and prevent bid-rigging.
“You have to react to it,” Christie said.
The governor said that after he read the story, “I went down to the state treasurer and said, ‘We’ve got to do something better on procurement at the state level. We’ve got to get better at this.’ And so he’s in the process right now of going through a procurement review at Treasury.”
Christie said he was prepared to tackle the scope of contract wrongdoing.
“I think part of it is that we have so much government,” he said, referring to the hundreds of towns, agencies and authorities each purchasing goods and services. “We don’t have enough people who are expert in this to do it the right way.”
“I think a lot of it is negligence and not corruption. Some of it is corruption, but I think even more of it is negligence,” he said.
The overhaul will recommend how to make the centralized state purchase system simpler to reduce errors by all who use it, including local governments, according to Treasury officials.
“If you simplify the process, people don’t make mistakes,” Treasury spokesman Andrew Pratt said.
PROGRESS THIS YEAR
The clearer rules and increased training would mean government officials and vendors who don’t follow the law on contract bids “won’t do this because they’ve made an error,” Pratt said.
He said Treasurer Andrew Sidemon-Eristoff, was previously interested in streamlining the contract process for businesses, but that the scope of his review had broadened.
“He’s going to come back to me with some recommendations, some of which we may be able to just impose from an executive action perspective and some of which we may need legislation on,” Christie said. “But I expect that some time this spring he’ll come back to me with some suggestions because we all read that report, and you want to change that.”
In December, The Record and Herald News obtained figures from the Comptroller’s Office detailing the mandatory reviews of all contracts that exceed $2 million, drafted between July 2010 and June 2011.
Details of each review are deemed advisory and kept confidential by state law.
But the total figures showed that towns and local agencies botched 126 of the 553 multimillion-dollar contracts drafted that fiscal year.
One-fifth of contracts worth between $2 million and $10 million contained errors that violated state laws.
The comptroller’s reviews of that size of purchase happen after the fact, meaning that of the 340 reviewed, the 64 flawed contracts were sent out to bid that way.
In the largest contracts worth more than $10 million, which the comptroller must approve before they go out to bid, 62 of 186 draft contracts, or around one-third, broke the law.
If officials reviewing the contracts suspect criminal wrongdoing, details are passed onto the Attorney General’s Office.
The Treasury Department, which oversees state purchases, and the Department of Community Affairs, which monitors local governments, routinely refer cases to the attorney general.
Treasury has ramped up training for department heads responsible for state contracts. The DCA, through its division of Local Government Services, oversees interactions between municipalities and the state, including oversight of local finances. It has increased its supervision of municipal finances.
Towns, where many professional services contracts are not subject to the same stringent rules as state departments thanks to the “fair and open” exemption, are under increased pressure to voluntarily improve the transparency of their bid processes.
Christie officials at DCA recently made towns follow a list of 50 “best practices” that included eight major benchmarks on contracting. Municipalities’ compliance on best practices affects how much they receive in state aid.
The governor said he believed voters cared about contract fraud once they understand how it wastes revenues that would otherwise be spent to improve local conditions.
“It can be a very important issue if it becomes symbolic of people’s frustration with government’s inattentiveness, ineffectiveness,” he said.
“I think that’s what happens sometimes, is that people say, ‘They only care about lining their own pockets, they’re not working for me.’ ‘My taxes are too high because they’re lining their own pockets, they’re not working for me.’ ‘My garbage doesn’t get picked up because they’re worried about how much the garbage guy’s kicking back to them not whether he’s effectively doing the job.’ ‘The stairs are crumbling down the front steps of the town hall, because they gave it to the campaign contributor who was completely unqualified not to the best qualified person to do the job.’ I think that’s where the nexus happens, and when it becomes an important issue,” Christie said.
“If you poll it just as, ‘Do you care about this stuff?’ it ends up low. But if you draw the connection to unethical activity and ineffective government, then I think it really moves up the scale, because they connect it to taxes and conditions in their community. And I think that’s where it becomes really important.”
By Juliet Fletcher/Statehouse Bureau Staff
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